Ministry of Corporate Affairs (MCA) allowed companies to make a Fresh Start and be current with the tax, regulatory compliance norms through a scheme called Companies Fresh Start Scheme (CFSS – 2020) announced on 30th Mar 2020.
The scheme is available from 1st Apr 2020 to 30th Sep 2020
The scheme is applicable to every Company which has not filed its Annual returns or documents with MCA within due dates is permitted to file returns under this scheme.
This Scheme shall not apply to the following companies
- Companies which has already filed an application for striking of name from the Registrar of Companies
- Companies to whom the final notice for striking off the name has already been initiated by the Designated Authority
- Companies which have been amalgamated
- Companies which have filed application for Dormant Status
- Vanishing Companies
- Companies for which there is increase in authorized capital (SH-7) and also charge related documents ( CHG-1, CHG-4, CHG-8 and CHG-9)
The defaulting inactive companies (who have not started any business) while filing documents under CFSS-2020 scheme can opt for
- Apply to get themselves declared as Dormant Company
- Apply for Striking of name of company from Registrar of Companies
- No additional fee ( per day penalty, fees) payable by the company. Normal fees as required by companies act shall be paid.
- Company gets an Immunity Certificate for future proceedings
- Company shall withdraw the appeals filed before opting for CFSS , 2020
Forms Covered under CFSS-2020 scheme
- Form MGT 7 (Annual Return)
- Form AOC-4 (Financial Statement)
- ADTT 1 (Appointment of Auditor)
- Any other related form
From EZTax.in perspective, the scheme is a great relief to many who started Companies with good intentions but off track due to unforeseen circumstances.
Given the unprecedented uncertainty due to Corona Virus Pandemic, the scheme is an opportunity for those who are facing challenges with the legal, compliance challenges may get a sigh of relief and use the scheme to get back to normal.